Here comes inflation — There are plenty of economic headaches facing the Biden administration right now from the debit limit issue to the impact of Delta to significant issues pushing through the giant budget reconciliation package. But the most dangerous risk remains inflation, which continues to spike across the economy, vexing consumers and businesses alike. Friday brings a fresh read on producer prices with expectations for a 0.6 percent headline number and 0.5 percent core. Those are big numbers. The question is whether we are hitting a peak in "transitory" inflation or more price hikes remain ahead. Via Pantheon's Ian Shepherdson : "Core PPI inflation is set for another cycle high in today's August report, but on a sequential month-to-month basis we think the peak is near. A big part of the story in recent months has been soaring margins, especially in the auto sector, where the chip shortage has allowed dealers to sell far more vehicles than usual at or above the sticker price. … "When margins stabilize, overall core PPI inflation likely will start to fall. Any downshift likely will be modest, though, given the continued disruptions to global supply chains, rising distribution costs and the tightness of the domestic labor market." Biden wants to call GOP bluff on the debt limit — Our Laura Barrón-López and Christopher Cadelago: "President Joe Biden is treating the latest Republican threats over the debt limit like a bluff. And the entire party, from congressional Democratic leadership to the top brass at the Treasury Department, is calling them on it. "Multiple Democratic sources on the Hill and with knowledge of the White House's thinking said the administration wants to include a suspension of the debt limit … in a continuing resolution to fund the government. Such a bill, which Congress is expected to consider as early as this month, would require 60 votes to pass in the Senate, meaning at least 10 Republicans would need to vote to advance the measure." GOOD FRIDAY MORNING — Happy weekend everyone. Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver. BIDEN TELLS XI HE WANTS TO AVOID CONFLICT — Our Nahal Toosi: "Biden told Chinese leader Xi Jinping late Thursday that the United States wants to 'responsibly manage the competition' between the two countries, in hopes of avoiding conflict. The two leaders held their second call since Biden took office at a time when Washington and Beijing are increasingly at odds on issues ranging from cybersecurity to trade, and the White House stressed that the discussion was about high-level themes. "'The two leaders had a broad, strategic discussion in which they discussed areas where our interests converge, and areas where our interests, values, and perspectives diverge. They agreed to engage on both sets of issues openly and straightforwardly,' the White House said in a readout of the call. 'The two leaders discussed the responsibility of both nations to ensure competition does not veer into conflict." BIDEN BEEFS UP VACCINE PUSH — Our Adam Cancryn and David Lim: "Biden ... announced plans to require staff vaccinations at all health facilities that receive federal funding, as part of a sweeping new plan to rein in the coronavirus. "The move represents a dramatic expansion of the administration's bid to boost vaccination rates among frontline health care workers, and comes as the administration readies a redoubling of efforts to rein in the virus. The requirement is part of a broader six-part blueprint for combating the pandemic that Biden unveiled." WATERS PUSHES $300B IN HOUSING AIDE — Our Katy O'Donnell: "House Financial Services Chair Maxine Waters (D-Calif.) … proposed $300 billion in spending on housing programs over a decade as part of Democrats' massive budget reconciliation bill. "The California Democrat's bill would significantly expand the Department of Housing and Urban Development's Section 8 rental assistance, with $90 billion in funding for new housing vouchers and project-based assistance over 10 years. It also includes more than $77 billion to address the public housing capital backlog of repairs and $10 billion to tackle lead-based paint and other health hazards in more than 581,000 housing units." |
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